Home builders now rush to respond to a surging market as nationwide sales rise 7.3 percent in the last year. Part of the rebound is because of an easing of standards by banks where the average borrower’s credit score dropped form 749 to 745 in the first two months of this year.
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Sudden Rise in Home Demand Takes Builders by Surprise
By Katherine Rampell New York Times March 22, 2013
SACRAMENTO — After six years of waiting on the sidelines, newly eager home buyers across the country are discovering that there are not enough houses for sale to accommodate the recent flush of demand.
“In my 27 years I’ve never seen inventories this low,” said Kurt K. Colgan, a broker with Lyon Real Estate in the Sacramento metropolitan area, where the share of homes on the market has plummeted by one of the largest amounts in the nation. “I’ve also never seen a market turn so quickly.”
The housing turnaround seems to have caught almost everyone in the business by surprise. As desirable as the long-awaited improvement may be, the unusually low level of homes for sale is creating widespread problems for buyers and sellers alike, leading to bidding wars and bubblelike price jumps in places that not long ago were suffering from major declines. In the Sacramento area, where the housing bust took an especially heavy toll, the median sales price has surged 15 percent over the last year, according to Zillow.
Nationwide, sales prices rose 7.3 percent over the course of 2012, according to the Standard & Poor’s Case-Shiller index, ranging from a slight decline in New York to a surge of 23 percent in Phoenix. Tracking more closely with the national trend were cities like Dallas, up 6.5 percent; Tampa, which rose 7.2 percent; and Denver, which gained 8.5 percent.
Report: Mortgages become slightly easier to get as standards ease
By E. Scott Reckard Los Angeles Times March 22, 2013
Here’s some good news on the mortgage availability front as you house-hunt this weekend: Credit standards appear to be easing, just a bit, according to an analytical study and reports from front-line lenders.
The average borrower credit score for a closed loan dropped from 749 in January to 745 in February, Ellie Mae Inc., a provider of software to home lenders, reported Friday. Though still steep, it was the lowest average score since last May, said Jonathan Corr, Ellie Mae’s chief executive.
The average down payment for a home purchase was exactly 20%, the report said — the first time it’s been that low since July.
And the percentage of total income that borrowers were being allowed to devote to debt payments averaged 35% — the highest since June, Corr said, “suggesting that the credit box may be expanding.”
Meantime, the mix of purchase versus refinance mortgages shifted toward the former, reflecting improved buyer confidence and a recent increase in mortgage rates, which dampens demand for refis. In February, 32% of all closed loans were for purchases, compared with 27% in January.
In another sign of easing mortgage standards, a few banks are now providing home-equity lines of credit for as much as 90% of the home value, up from 80%, said Mark Cohen, a Beverly Hills mortgage banker.
That means that someone owing $350,000 on a $500,000 house might get a $100,000 credit line instead of one for $50,000 – assuming they have a minimum credit score of 720 and can fully document their ability to make payments.
Cohen said he’s also seen a slight loosening of borrower worthiness gauges such as the debt-to-income ratio. “There’s a slight credit easing, but in a subtle way,” he said.
For people with less than 20% down payments, mortgage insurance is now easier to get, said Jeff Lazerson, a Laguna Niguel mortgage broker.
And so-called delayed financing, unavailable in recent years, is back, Lazerson said — someone who paid cash for a one- to four-unit property may be able to get back up to 75% of their money by taking out a loan right away, instead of having to wait for six months.
Austin council delays decision that may bring denser development
By Marty Toohey Austin American-Statesman March 22, 2013
Austin’s increasingly heated debate over changes that could lead to more development over environmentally sensitive land will continue at least another week.
Late Thursday, after more than three hours of impassioned public testimony, the City Council delayed a decision on whether to relax Austin’s “grandfathering” regulations, which Texas Attorney General Greg Abbott recently said would be overturned if challenged in court. Changing the grandfathering regulations would effectively loosen some of the city’s environmental standards, and council members said they wanted a better idea of just how much additional construction would happen as a result.
“It is very difficult to get a grasp on the scope and breadth of what we’re talking about here,” Council Member Kathie Tovo said.
Rundberg area hopes new police operation will succeed where past efforts failed to root out chronic crime
By Dave Harmon Austin American-Statesman March 24, 2013
After Austin Police Chief Art Acevedo explained to a group of neighbors his department’s newest plan to attack crime in the Rundberg Lane area, a man in a Dickies T-shirt and scuffed work boots stood and addressed Acevedo with an edge in his voice.
“I want to know what kind of protection the police or the state can give the people about the drug dealing,” he said. Like many of his neighbors, he’s afraid the dealers will retaliate if he calls police.
“Four drug dealers right on the sidewalk and I can’t do nothing,” he said, disgustedly.
For years, the area’s residents have seen the police flood their neighborhoods under the flag of some special operation – with names like Good Neighbor or Take Back Rundberg – and then watched crime return when the pressure ended.
They’ve marched down Rundberg, waving anti-crime signs. They’ve held rallies in front of drug houses and motels where prostitutes and dealers do business.
But the area has stubbornly refused to be taken back.